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Notes -
How could that work? You said resold items are exempt.
I can sell my house to the plumber tax free, he can work on it (of course, paying FairTax on everything he buys from HomeDepot) and then sell it back to me for more, again, no tax. The difference in price minus the difference in supplies he purchased is the value-add from his skilled labor, which is untaxed.
They do use less resources, but they use much more labor per unit output because they don't have nearly the economies of scale. Or if you prefer more formally, labor is a kind of resource which is in a substitute relationship with physical resources.
This is not to say that repairing is bad! In many cases it makes sense, it's only that the tax system shouldn't have such a strong preference because it's distorting.
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